Boston Properties, Inc. BXP is scheduled to report first-quarter 2018 results on Apr 24, after the market closes .
Last quarter, this REIT, which mainly owns and develops Class A office real estates in the United States, delivered lower-than-expected performance in terms of funds from operations (FFO) per share, witnessing a negative surprise of 2.61%.
However, over the trailing four quarters, the company surpassed the Zacks Consensus Estimate in two occasions and missed in the other two. It delivered an average positive surprise of around 0.28% during this period.
The graph below depicts this surprise history:
Boston Properties, Inc. Price and EPS Surprise
Boston Properties, Inc. Price and EPS Surprise | Boston Properties, Inc. Quote
Shares of Boston Properties have declined 0.3% over the past three months compared with the industry 's descend of 4.7%.
Let's see how things are shaping up for this announcement.
Factors That Might Influence Q1 Results
Boston Properties, based in Massachusetts, concentrates on a few select high-rent and high barrier-to-entry geographic markets. The company's solid tenant and industry base, including several bellwethers, ensure steady rental revenue growth. Further, Boston Properties has achieved an annual compounded revenue growth rate of 7.09% over the last five years. Given the company's improving core operations, we anticipate this trend to continue, going forward. Moreover, the company is likely to experience solid contribution in 2018 from its non-same-property portfolio, mainly driven by development deliveries.
In fact, with economic improvement and recovery in the job market, healthy demand for office spaces is likely to have continued in the company's markets in the quarter under review. Particularly, growth in demand for office spaces is anticipated to have been fueled by technology and life sciences businesses.
Nonetheless, the company faces intense competition from other operators of office properties. Further, growth in the supply of office spaces in the market remains a concern because higher supply usually leads to lesser absorption and also curtails the landlord's capability to demand more rent.
Amid these, the Zacks Consensus Estimate for the base rent of $514 million reflects marginal growth from the prior-quarter figure.
Over the past 30 days, the Zacks Consensus Estimate for FFO per share for the first quarter remained stable at $1.50, reflecting year-over-year projected increase of 1.35%. The company projects first-quarter FFO per share to be in the range of $1.47-$1.49.
However, consensus estimates for revenue for development and management services are projected to be $8.62 million, down 13.5% sequentially. Further, the Zacks Consensus Estimate for first-quarter revenues is pegged at $604.5 million, indicating decline of 4.4% year over year.
Our proven model cannot conclusively predict if Boston Properties will beat the Zacks Consensus Estimate this time. That's because it doesn't have the right combination of two key ingredients - a positive Earnings ESP and a Zacks Rank #3 (Hold) or better - to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Zacks ESP: The company has an Earnings ESP of -0.32%.
Zacks Rank: Boston Properties carries a Zacks Rank #3, which increases the predictive power of ESP. However, we also need a positive ESP to be confident of a positive surprise.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider as our model shows that these have the right combination of elements to report a positive surprise this quarter:
PS Business Parks, Inc. PSB , scheduled to release earnings on Apr 24, has an Earnings ESP of +0.67% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Taubman Centers, Inc. TCO , slated to release first-quarter results on Apr 26, has an Earnings ESP of +0.47% and a Zacks Rank of 3.
Simon Property Group, Inc. SPG , slated to release quarterly numbers on Apr 27, has an Earnings ESP of +0.32% and a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) - a widely used metric to gauge the performance of REITs.
Can Hackers Put Money INTO Your Portfolio?
Earlier this year, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor's Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Download the new report now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Simon Property Group, Inc. (SPG): Free Stock Analysis Report Taubman Centers, Inc. (TCO): Free Stock Analysis Report Boston Properties, Inc. (BXP): Free Stock Analysis Report PS Business Parks, Inc. (PSB): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research